The financial sector is made up of businesses that provide services such as loans, savings, insurance, payment services, and personal and business money management. Financial sector stocks include a wide range of companies involved in retail and commercial banking, accounting, insurance, asset management, credit cards and brokerage. Well-known companies in the industry include Wells Fargo & Co., The Goldman Sachs Group Inc., and Morgan Stanley.
Financial stocks, represented by a exchange-traded fund (ETF)—the selected SPDR Financial Sector ETF (45) — marginally outperformed the broader market, with a full return -7.9% compared to Russell 1000 total return of -7.0% over the past 12 months. These market performance figures and all statistics in the tables below are as of August 5, 2022.
Here are the top three financial stocks with the best value, fastest growth and most momentum.
These are the financial stocks with the lowest 12 months follow-up price/earnings ratio (P/E). Since profits can be returned to shareholders in the form of dividends and redemptionsa low P/E ratio indicates that you pay less for every dollar of profit generated.
| Financial stocks at the best value for money | |||
|---|---|---|---|
| Price ($) | Market Cap (Market Cap) ($B) | 12 month price/earnings ratio | |
| Brighthouse Financial Inc. (BHF) | 45.13 | 3.4 | 3.5 |
| American International Group Inc. (AIG) | 51.83 | 41.1 | 4.5 |
| OneMain Holdings Inc. (OMF) | 36.51 | 4.5 | 4.4 |
Source: Y-Charts
- Brighthouse Financial Inc.: Brighthouse Financial provides annuities and life insurance products across the United States.
- American International Group Inc.: American International Group, Inc. offers products such as property and casualty insurance, life insurance, retirement products and other financial services to business and individual customers. It operates through the following segments: general insurance, life and pension and other operations. The General Insurance segment includes North American insurance business and international business segments.
- OneMain Holdings Inc: OneMain Holdings, Inc. is a consumer finance company that provides personal loan origination, underwriting and servicing services, primarily to non-preferred customers. It operates through the following segments: Consumer & Insurance and Other segments.
These are the best financial stocks ranked by a growth model that rates companies based on a 50/50 weighting of their most recent quarterly results. year on year (YOY) percentage revenue growth and last quarter year-on-year earnings per share (EPS) growth. Sales and profits are critical factors in the success of a business. Therefore, classifying companies according to a single measure of growth makes a classification sensitive to accounting anomalies in this trimester (such as changes in tax laws or restructuring costs) that may render one figure or another unrepresentative of the business as a whole. Companies with quarterly EPS or revenue growth greater than 2,500% were excluded as outliers.
| Fastest growing financial stocks | ||||
|---|---|---|---|---|
| Price ($) | Market capitalization ($B) | EPS growth (%) | Revenue increase (%) | |
| Upstart Holdings Inc. (UPST) | 29.60 | 2.5 | 209.1 | 155.6 |
| First Citizens BancShares Inc. (FCNCA) | 798.94 | 12.8 | 14.9 | 124.2 |
| SLM Corp (SLM) | 3:33 p.m. | 3.9 | 193.2 | 58.8 |
Source: Y-Charts
- Upstart Holdings Inc.: Upstart Holdings is a holding company with subsidiaries that offers a cloud-based artificial intelligence (AI) lending platform. The platform makes it easy for consumers and lenders to share data and helps banking partners reduce risk by using AI to assess potential loans. Upstart Holdings announced its results on May 9 for the first quarter of fiscal 2022. Total revenue was $310 million, a 156% increase from the first quarter of 2021.
- First Citizens BancShares Inc.: First Citizens BancShares is a financial holding company and is the product of the January 2022 merger of BancShares and CIT Group, creating a major US financial company with $110 billion in assets. Through its subsidiaries, it provides services such as retail and commercial banking and wealth management. First Citizens BancShares reported earnings on July 28 for the second quarter of fiscal 2022. Second-quarter net income available to common shareholders was $238 million, compared to first-quarter net income available to common shareholders. of $264 million.
- SLM Corp: SLM, known as Sallie Mae, provides and administers student loans. Its services include private education loans, banking, college savings and insurance services. Sallie Mae reported earnings on July 28 for the second quarter of fiscal 2022. Second-quarter net income attributable to common shares was $340 million, compared to $139 million in the same quarter a year ago.
Financial stocks have had the highest total return over the past 12 months.
| Financial stocks with the most momentum | |||
|---|---|---|---|
| Price ($) | Market capitalization ($B) | Total return over 12 months (%) | |
| LPL Financial Holdings Inc. (LPL) | 225.14 | 18.0 | 60.3 |
| Ryan Specialty Holdings Inc. (RIAN) | 44.57 | 4.9 | 49.0 |
| First Horizon Corporation (MFA) | 23.0 | 12.3 | 51.7 |
| Russell 1000 | N / A | N / A | -7.0 |
| Selected Financial Sector SPDR ETFs (45) | N / A | N / A | -7.9 |
Source: Y-Charts
- LPL Financial Holdings Inc.: LPL Financial Holdings operates as a broker. It provides a brokerage and investment advisory services platform to financial advisors across the United States. In addition, LPL offers clearing and compliance services, account management and rebalancing, annuities, exchange-traded products, mutual funds, and similar financial products. LPL announced earnings on August 2 for the second quarter of 2022. Net profit was $161 million, up 35% from a year ago.
- Ryan Specialty Holdings Inc.: Ryan Specialty is a specialist product and solutions service provider for brokers, agents and insurers, offering distribution, underwriting, product development, administration and risk management services by acting as wholesale broker and underwriter manager. Ryan Specialty reported earnings on May 12 for the first quarter of fiscal 2022. Total revenue increased 24.2% year-over-year (YOY) to $386.9 million. dollars.
- Premier Horizon Corp: FHN Financial offers capital market services, regional banking and wealth management. The company also provides investment services and balance sheet management solutions. First Horizon reported earnings on July 19 for the second quarter of fiscal 2022. Second quarter 2022 earnings were trimmed $29 million net after tax, or $0.05 per share.
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